> Net loss - GAAP net loss was $511 million for the fourth quarter of 2013 compared to a net loss of $9 million in the same period last year. The company's Q4 GAAP net loss included $521 million of stock-based compensation expense, of which $406 million was for restricted stock units previously granted to employees, for which no expense had been recognized, until the effective date of our initial public offering in accordance with GAAP.
Volatility is typically much higher in after hours sessions because there isn't nearly as much liquidity in the market. Tomorrow's opening price will probably be more informative. Also good to keep in mind that even if it is 20% down from today's close that would still leave it up about 17% from it's first trading day in November and up 100% from the IPO price ($26).
It's an interesting question. By comparison, at the end of 2010 Facebook had about 2,000 +/- employees and $2b in sales for that fiscal year. Twitter is roughly three times overstaffed compared to Facebook.
I've said this before, but if Twitter added a tier of paid accounts that offered analytics, scheduling and other features, I'd upgrade. Maybe there would be enough revenue to keep the servers running.
Full disclosure: I used to work at Twitter, and this conversation came up all the time. I even proposed it myself as a naive new hire, and after a few good-humored suggestions from coworkers to run the math, ended up with roughly the following scenario:
Say 1% of Twitter's active users would be willing to pay for such a service. (That's extremely generous, I think, but it makes the math easier.)
At 240 million MAUs, that gives ~2.4 million paying users. Say the price was comparable to Flickr at $50/year. (Again, very generous, and probably out of reach of most users outside US/Japan/EU, but we'll try it for the sake of argument.)
After up-selling each and every one of those users, the company could have annual revenue of about $120 million...or roughly _half_ what they cleared in Q4.
Even with 2-3x organic growth in the next couple of years, it would be a dead-end in terms of revenue, and better-financed competitors would be able to push them around, poach their best staff, etc.
They're a big company with lots of employees and infrastructure and not a whole lot of revenue stream. The question isn't so much how can they make a big loss, it's how could anybody have expected different.
— https://investor.twitterinc.com/releasedetail.cfm?ReleaseID=...